inheritance tax

mullinr2

I have a meeting with my solicitor tomorrow about this, but I just wanted to get a few opinions here. I've already posted in the farming section and got a bit of advice from a few posters.

Basically my parents have a farm of roughly 180 acres with most of it under forestry. The rest is rented for now. The land is of very good quality so will be worth a good bit.
They have a will made out and basically they will be leaving the farm to both of us and a house in town to my sister which in todays market would be worth 250000. I have a house with my wife worth 150000 at the moment.

Will we qualify for agricultural relief, otherwise can ye imagine the tax myself and my sister would have to pay. It would mean finacial ruin for both of us. My parents just said to me, sell the land, but its not that easy to sell land.

gigglemuch82

I'd suggest you go talk to an accountant. But generally, you can qualify for an agricultural relief if you satisfy certain conditions - i.e. but not limited to, a majority of your asset (generally 80% - after inheirtance) is composed of agricultural asset. However, you cannot sell the asset for a certain period of time - otherwise there will be clawbacks. You don't actually have to farm the land - you can rent it out.

A qualified accountant will be able to give you an advice as to how you can claim this relief therefore minimising your tax liability.

mullinr2

gigglemuch82 wrote: »

I'd suggest you go talk to an accountant. But generally, you can qualify for an agricultural relief if you satisfy certain conditions - i.e. but not limited to, a majority of your asset (generally 80% - after inheirtance) is composed of agricultural asset. However, you cannot sell the asset for a certain period of time - otherwise there will be clawbacks. You don't actually have to farm the land - you can rent it out.

A qualified accountant will be able to give you an advice as to how you can claim this relief therefore minimising your tax liability.

Talked to my solicitor. He just urged me to get my parents to talk to their accountant and/or tax lawyer. All I can do is keep my assets down so everything from savings to house is going to be in my wife's name.

gigglemuch82

Yeah that's a good start

Santa Cruz

Absolutely. Get the best inheritance tax advice you can afford. It will save you thousands.

Pawwed Rig

A mistake here could cost a fortune as the 90% relief will apply if you both meet the farmer test. You need to start tax planning. Goto a Tax advisor rather than a solicitor or an accountant.

Zacchaos

Business property relief can also apply to agricultural property where it fails to come under agricultural relief (for instance if you failed the "farmer test"). It's a very similar relief to agricultural relief and you should bring this up when talking to a tax advisor, or solicitor with appropriate tax knowledge.

If you intend to sell the land straight after you get it, neither relief is likely to be of benefit to you unless you reinvest the proceeds in the farm/business.

Reebrock

Are our parents still alive? Is selling the land now an option, and filterign the money little by little.

Inheritance TAX is a joke.

Mr. Incognito

You will need specialist tax advice, especially if you have a home already which affects agricultural relief.

Get to a tax consultant pronto

Santa Cruz

Reebrock wrote: »

Are our parents still alive? Is selling the land now an option, and filterign the money little by little.

Inheritance TAX is a joke.

You can say that about any tax but they are facts of life. The objective should be have proper financial planning so as to minimise or eliminate any tax liability.
Thee people who say "It's bad luck to make a will" are usually the people who's estate is hit for inheritance tax.
Inheritance tax is seen as unearned income and once over the threshold can be severely taxed, 33% I think in the case of parent to child.
With property prices now it is very easy to go over the threshold. Proper planning can help in lessening or eliminating the tax

Pawwed Rig

Reebrock wrote: »

Inheritance TAX is a joke.

Arguably it is one of the fairest taxes in that the recipient who has done nothing to earn the money is hit with a tax bill. It better equalises people.
That said, the amount of reliefs available mean that there are usually ways to not pay it if planned properly.

Pat Mustard

gigglemuch82 wrote: »

I'd suggest you go talk to an accountant.

With most taxes, I would accept that accountants will know more. Solicitors are not generally trained in VAT, for instance.

In general, most solicitors tend to know considerably more about CAT/Inheritance Tax than most accountants. If it is a toss-up between a GP solicitor and and GP accountant, I would give it to the GP solicitor.

If it's a specialist tax consultant, that may be a different story, depending on who it is. Of course, there are also solicitors who specialise in the area.

I've come across guys who advertise as tax consultants, who did not understand the distinction between valuation date and date of death; a potentially expensive lack of understanding that would be unlikely to be made by even a good trainee solicitor.

Arbiter of Good Taste

Go to a specialist tax advisor - solicitors and accountants who do not specifically practice tax will not be appropriate. Try the Irish Taxation Institute website who give a list of tax advisors around the country. You don't need to go to a Big Four or similarly expensive advisors, though there are plenty of big four trained tax advisors who are now sole practitioners who charge reasonably and know what they are doing.

Victor

mullinr2 wrote: »

Will we qualify for agricultural relief, otherwise can ye imagine the tax myself and my sister would have to pay. It would mean finacial ruin for both of us.

You will have to pay tax of X, you will inherit at least 3X. As they say, first world problem.

My parents just said to me, sell the land, but its not that easy to sell land.

It's not that hard either.